Bradley Jacobs has been the CEO of XPO Logistics, Inc. (NYSE:XPO) since 2011. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we’ll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Bradley Jacobs’s Compensation Compare With Similar Sized Companies?
According to our data, XPO Logistics, Inc. has a market capitalization of US$5.3b, and paid its CEO total annual compensation worth US$13m over the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$625k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$4.0b to US$12b. The median total CEO compensation was US$7.2m.
Thus we can conclude that Bradley Jacobs receives more in total compensation than the median of a group of companies in the same market, and of similar size to XPO Logistics, Inc.. However, this doesn’t necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
The graphic below shows how CEO compensation at XPO Logistics has changed from year to year.
Is XPO Logistics, Inc. Growing?
Over the last three years XPO Logistics, Inc. has grown its earnings per share (EPS) by an average of 41% per year (using a line of best fit). Its revenue is down 3.7% over last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. While it would be good to see revenue growth, profits matter more in the end. Shareholders might be interested in this free visualization of analyst forecasts.
Has XPO Logistics, Inc. Been A Good Investment?
XPO Logistics, Inc. has served shareholders reasonably well, with a total return of 17% over three years. But they probably don’t want to see the CEO paid more than is normal for companies around the same size.
We compared the total CEO remuneration paid by XPO Logistics, Inc., and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
However we must not forget that the EPS growth has been very strong over three years. We also note that, over the same time frame, shareholder returns haven’t been bad. You might wish to research management further, but on this analysis, considering the EPS growth, we wouldn’t call the CEO pay problematic. On another note, XPO Logistics has 2 warning signs (and 1 which is a bit unpleasant) we think you should know about.
If you want to buy a stock that is better than XPO Logistics, this free list of high return, low debt companies is a great place to look.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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